Plantronics 2015 Annual Report Download - page 23

We hedge a portion of our Euro and GBP forecasted revenue exposures for the future, typically over 12-month periods. In addition,
we hedge a portion of our Mexican Peso forecasted cost of revenues and we have foreign currency forward contracts denominated
in Euros, GBP, and Australian Dollars that hedge against a portion of our foreign-currency denominated assets and liabilities. Our
foreign currency hedging contracts reduce, but do not eliminate, the impact of currency exchange rate movements, particularly if
the fluctuations are significant or sustained, and we do not execute hedging contracts in all currencies in which we conduct business.
There is no assurance that our hedging strategies will be effective. Additionally, even if our hedging techniques are successful in
the periods during which the rates are hedged, our future revenues, gross profit, and profitability may be negatively affected both
at current rates and by adverse fluctuations in currencies against the USD. See Item 7A for further quantitative information
regarding potential foreign currency fluctuations.
Our operating results are difficult to predict, and fluctuations may cause volatility in the trading price of our common stock.
Given the nature of the markets in which we compete, our revenues and profitability vary from quarter to quarter and are difficult
to predict for many reasons, including the following:
• variations in the volume and timing of orders received during each quarter;
• the timing of customers' sales promotions and campaigns;
• the timing of large customer deployments of UC infrastructure;
• the timing of new product introductions by us and our competitors and phase out of existing products;
• competition, including pricing pressure, promotions and campaigns by us, our competitors or our customers;
• failure to timely introduce new products within projected costs;
• changes in technology and desired product features, including whether those changes occur in the manner and timeframe
we anticipate;
• general economic conditions in the U.S. and in our international markets, including foreign currency fluctuations;
• seasonality;
• customer cancellations, and rescheduling;
• fluctuations in costs for components;
• shifts in product, geographic or channel mix; and
• investments in and the costs associated with new product development and strategic initiatives.
Fluctuations in our operating results, including the failure to meet our expectations or the expectations of financial analysts, may
cause volatility, including material decreases, in the trading price of our common stock.
The success of our business depends heavily on our ability to effectively market our UC products, and our business could be
materially adversely affected if markets do not develop as we expect or we are unable to compete successfully.
Our Enterprise products represent our largest source of revenue, and we regard the market for headsets designed for UC as our
greatest long-term opportunity in the Enterprise market. We believe the implementation of UC technologies by large enterprises
will be a significant long-term driver of UC headset adoption, and, as a result, a key long-term driver of our revenue and profit
growth. Accordingly, we continue to invest in the development of new products and enhance existing products to be more appealing
in functionality and design for the UC office market; however, there is no guarantee significant UC growth will occur or that we
will successfully take advantage of any growth that does occur.
Our ability to realize and achieve positive financial results from UC adoption could be adversely affected by a number of factors,
including the following:
• As UC becomes more widely adopted, competitors may offer solutions that will effectively commoditize our headsets
increases, which, in turn, may assert pressure on us to reduce the prices of one or more of our headset products.
• The market success of major platform providers and strategic partners such as Microsoft Corporation, Cisco Systems,
Inc., Avaya, Inc., Alcatel-Lucent, and Huawei, and our influence over such providers with respect to the functionality of
their platforms and product offerings, their rate of deployment, and their willingness to integrate their platforms and
product offerings with our solutions, is limited. For example, Microsoft’s Lync solution has become a large part of the
UC marketplace and the decision by Microsoft to transition from Lync to Skype for Business is a significant transition
in the market and may cause end customers to modify or pause their deployment schemes or schedules while assessing
the implications of Microsoft’s decision.
• Failure to timely introduce solutions that are cost effective, feature-rich, stable, and attractive to our customers within
forecasted development budgets.
• Failure to successfully implement and execute new and different processes involving the design, development, and
manufacturing of complex electronic systems composed of hardware, firmware, and software that works seamlessly and
continuously in a wide variety of environments and with multiple devices.
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